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When is fiscal policy most effective and monetary?

Updated: 11/18/2022
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Q: When is fiscal policy most effective and monetary?
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Which action is most likely to result in a decrease in money supply?

A contractionary monetary policy or a contractionary fiscal policy.


Fiscal policy and monetary policy?

fiscal is the governments budget in terms of spending and expenditure. so there can either be a budget deficit or a budget surplus. when there is a budget surplus, government use a contractionary fiscal policy, and when there is a deficit, they use an expansionary fiscal policy. Monetary policy is used to combat an economy growing to quickly and inflation is rising. in most countries this is the Official Cash Rate. There is a tight monetary policy which government can impose if the economy is growing rapidly and this is used to constrict spending within that economy


What is fiscal policy and how is it different to monetary policy?

Monetary policy refers to any measure that bring about changes in the rate of interest and the supply of money. Fiscal policy is the term used to describe how governments use taxation and government spending to manage the economy. <><> Fiscal policy includes increase or decrease of government expenditures and taxes while monetary policy includes expansion n contraction of money supply. <><> Fiscal policy is the government's budget in terms of spending and expenditure. There can either be a budget deficit or a budget surplus. When there is a budget surplus, the government uses a contractionary fiscal policy, and when there is a deficit, they use an expansionary fiscal policy. Monetary policy is used to combat an economy growing to quickly and inflation is rising. In most countries this is the Official Cash Rate. There is a tight monetary policy which government can impose if the economy is growing rapidly and this is used to constrict spending within that economy


What is the difference between fiscal monetary and supply-side economics policy?

The fiscal policy focuses on how government intervention will shift the demand depending on which issue is the most pressing. The supply policy is used when more employment is needed.


Monetary policy is made by?

In most countries, monetary policy is made by the Central Bank, which prints money.

Related questions

Which action is most likely to result in a decrease in money supply?

A contractionary monetary policy or a contractionary fiscal policy.


Fiscal policy and monetary policy?

fiscal is the governments budget in terms of spending and expenditure. so there can either be a budget deficit or a budget surplus. when there is a budget surplus, government use a contractionary fiscal policy, and when there is a deficit, they use an expansionary fiscal policy. Monetary policy is used to combat an economy growing to quickly and inflation is rising. in most countries this is the Official Cash Rate. There is a tight monetary policy which government can impose if the economy is growing rapidly and this is used to constrict spending within that economy


What is fiscal policy and how is it different to monetary policy?

Monetary policy refers to any measure that bring about changes in the rate of interest and the supply of money. Fiscal policy is the term used to describe how governments use taxation and government spending to manage the economy. <><> Fiscal policy includes increase or decrease of government expenditures and taxes while monetary policy includes expansion n contraction of money supply. <><> Fiscal policy is the government's budget in terms of spending and expenditure. There can either be a budget deficit or a budget surplus. When there is a budget surplus, the government uses a contractionary fiscal policy, and when there is a deficit, they use an expansionary fiscal policy. Monetary policy is used to combat an economy growing to quickly and inflation is rising. In most countries this is the Official Cash Rate. There is a tight monetary policy which government can impose if the economy is growing rapidly and this is used to constrict spending within that economy


What is the difference between fiscal monetary and supply-side economics policy?

The fiscal policy focuses on how government intervention will shift the demand depending on which issue is the most pressing. The supply policy is used when more employment is needed.


Whos work is most modern fiscal policys based on?

Modern fiscal policy is based on the work of prominent economists such as John Maynard Keynes, who advocated for government intervention in the economy to promote growth and stability through fiscal measures like government spending and taxation. Other influential economists in shaping modern fiscal policy include Milton Friedman, who focused on the importance of monetary policy in stabilizing the economy.


Monetary policy is made by?

In most countries, monetary policy is made by the Central Bank, which prints money.


What is the Fed's most powerful tool for influencing monetary policy?

By and large, open-market operations comprise the most powerful tool the Fed has to influence monetary policy.


Fiscal policy options to stimulate the economic includes?

1) Reduce taxes. 2) Increase government spending. 3) Make 1 or 2 most efficient/cost-effective.


What are the two types policy of economics?

There are two general types of economic policies. The first is fiscal policy, which operates on the principle that the most effective way for a government to influence the economy is through its spending. For example, in a recession, governments will try to stimulate the economy by spending more money by building infrastructure and creating training programs, for example. The second is monetary policy, which operates on the principle that the most effective way for a government to influence the economy is through its control of the money supply. For example, in a recession, governments will lower interest rates to encourage borrowing and increase the money supply in an attempt to stimulate the economy.


Most theories on modern fiscal policy are based on the works of which economist?

John Maynard Keynes


During the severe recession of 2008-09 the US government embarked on an aggressive fiscal policy to try and end the downturn Most of the increase in spending would be financed by borrowing the gove?

The full question:During the severe recession of 2008-09 the US government embarked on an aggressive fiscal policy to try and end the downturn. Most of the increase in spending would be financed by borrowing; the government is also cutting taxes for many, but not all, Americans. At the time the policy was formulated many economists were confident that the policy would be effective, while another group was quite convinced that the policy would do little to raise the level of GDP. Discuss under what financing and economic conditions an expansionary fiscal policy could be expected to raise the level of real GDP, and under what conditions the policy would fail. Then state your opinion as to whether or not the US policy will work.


The aiap is designed to achive the most effective and economical policy possible by using what?

The AIAP is designed to achieve the most effective and economical policy possible by using which of the following?